Reality TV Meltdown: LMNO Claims Its Accountant Stole Money and Discovery Stole Hit Show

LMNO Claims Discovery Stole Hit Show
Courtesy of TLC

It’s a drama-filled meltdown worthy of… well, reality TV. LMNO Cable Group, producer of numerous cable reality shows, claims in a new lawsuit that its accountant has been stealing from the company for years. The company also alleges that Discovery Communications took advantage of the situation to steal its top-ranked show, TLC’s “The Little Couple.”

Last week, Discovery notified LMNO that it was terminating its contracts for six shows, including “The Little Couple” and “7 Little Johnstons,” both of which feature stars with dwarfism. According to Discovery, this followed a lengthy review of its relationship with LMNO, “which revealed procedures and practices that did not respect Discovery’s contractual rights.”

LMNO counters that it was the victim of an extensive and long-running embezzlement scheme perpetrated by its former accountant. According to a federal lawsuit filed on Wednesday, LMNO claims the accountant falsified the company’s books in order to divert hundreds of thousands of dollars into his own pocket. When LMNO discovered the scheme last year, the accountant allegedly tried to extort the company for an additional $800,000, according to the lawsuit. If the company did not pay up, the suit claims that the accountant threatened to tell Discovery about the doctored books.

“LMNO chose to stand up for itself, and refused to pay this illegal ransom,” the lawsuit states. “Instead it reported the accountant to the authorities. In its darkest hour, however, what LMNO did not count on was treachery.”

LMNO contends that the accountant took the company’s doctored financial documents to Discovery and that Discovery then used them to manufacture a reason to dissolve its relationship with LMNO. LMNO claims that Discovery initiated a surprise audit of LMNO’s books, knowing that LMNO could not produce its books because they had been stolen. LMNO also claims that Discovery is now producing new episodes of “The Little Couple” on its own.

According to the suit, the accountant threw many of LMNO’s records in dumpsters, and also hired someone to mix up the records with other paperwork. A photograph included in the lawsuit appears to show seven large cardboard boxes of accounting records that were found in a storage unit.

LMNO has had to lay off employees since last week’s announcement, though it retains relationships with other networks.

“LMNO remains steadfast in our total commitment to defend our company and our reputation from false accusations and egregious actions,” the company said in a statement.

Discovery issued its own statement, in which it said it would aggressively defend against the LMNO lawsuit.

“We believe that at the heart of any enterprise is trust and mutual respect between commercial partners,” a Discovery spokesperson said.

Filed Under:

Want to read more articles like this one? SUBSCRIBE TO VARIETY TODAY.
Post A Comment 1

Leave a Reply

1 Comment

Comments are moderated. They may be edited for clarity and reprinting in whole or in part in Variety publications.

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

  1. flix4u says:

    Not surprised but dissapointed that this issue is being politicized when it’s purely a business issue dealing with accusations of fraud, breach of contract, malfeasance, blackmail, etc., and there’s obviously more drama behind the scenes than when the cameras are rolling.

    There are inherent budgetary hurdles in producing scripted and unscripted reality TV. It’s likely LMNO did what it had to do to make the best shows possible with their various budget constraints. Were some line items bloated? Probably! Is it possible that some line items were in sufficient to cover the costs and funds were moved from one category to another? Sure, and it’s generally acceptable. If there was anything of an epic proportion done by LMNO to steal, shelter, and defraud Discovery and the accountant discovered this, if he was above board, he would have reported it to law enforcement and Discovery Networks, not try to extort LMNO for more money. He also would not have simply mixed up the files but he would have given them to Discovery or the authorities if his intention was to prove that LMNO was stealing from Discovery. Simething is clearly wrong in the state of Denmark!

    So, it’s clear that there’s much more to the story (as there usually is) and it’s too early to pass final judgement on any of the parties. So, politics and personal feelings aside, how about settling down with the hysteria, and off-the-wall comments and slander, and let the proper authorities, courts, and the parties themselves (along with their legal representation) handle the matter directly. Taking shots at Eric Schotz, LMNO, and Discovery for that matter, may be the result of what you think you know as oppose to what you really know and what you can prove, but it’s not necessarily the truth as to what has happened here.

More TV News from Variety